Big investors slash their stakes in Gunns

Two of
Gunns
’ largest shareholders, Perpetual and Perennial, have voted with their feet, revealing that they were behind heavy selling of the stock this week.

Investors have been angry over the company’s performance and that its long-serving chairman,
John Gay
, would not retire when asked to do so several months ago.

In April, Mr Gay said he would retire at the annual meeting in November, but shareholder frustration has been stoked by his appointment as chairman of Southern Star, a new vehicle set up to hold Gunns’ planned pulp mill at Bell Bay in Tasmania and its timber planatations.

Gunns’ single largest shareholder, Perpetual, cut its holding to 13.51 per cent from 15.55 per cent on Monday. It had last trimmed its holding in August, from 15.56 per cent.

Gunns’ third-biggest shareholder, Perennial, dumped 1 per cent of its stock that it picked up last July on the same day. It now holds 9.37 per cent.

Reports circulated that Gunns’ second-biggest shareholder, Concord Capital, snapped up a few additional shares yesterday. Perpetual and Perennial would not comment.

The line of 20 million shares sold on Tuesday afternoon at 25¢ a share, representing about 2.6 per cent of Gunns’ shares on issue, is also believed to have been sold by Perennial and Perpetual.

Gunns’ market cap has slumped from $2.5 billion three years ago to just $230 million yesterday. Its shares clawed back 2¢ to end at 28.5¢ yesterday, but they have fallen about 40 per cent in the past eight days.

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Speculation was rife about the company’s future with such a weakened share price, some shareholders believing it will place further pressure on Mr Gay – the champion of the seven-year campaign to build the pulp mill – to retire sooner. Some investors speculated that the company may now be a takeover target.

Gunns’ spokesman Matt Horan said the company does not comment on share price movements.

Gunns’ disastrous past few days on the market prompted rival Wilmott Forests to release a statement to re­assure investors about its position in the forestry sector.

Willmott, which manages 53,000 hectares of plantations throughout the country on behalf of 6000 grower­-investors, said it is on track to deliver a sound full-year result.